On 7 September 2021, the Governor of the State Bank of Vietnam (SBV) issued Circular 14/2021/TT-NHNN (Circular 14) amending and supplementing Circular 01/2020/TT-NHNN (Circular 01) on rescheduling debt repayment, fee exemption and reduction, and keeping debt group to support customers affected by the Covid-19 epidemic. EuroCham has actively advocated for the amendment of Circular 01 and its successor, Circular 03/2021/TT-NHNN (Circular 03).
Lately, many EuroCham members have faced difficulties from a lack of short-term cash flow to pay expenses and maintain production activities. Circular 01 only applies to debt restructuring for loans incurred before 10 June 2020 from lending and financial leasing activities, making short-term loans almost eligible for restructuring. This puts great pressure on the short-term cash flow of enterprises, making it difficult for them to repay debts on time. This, in turn, makes it more difficult to borrow new loans to maintain operations.
To resolve this issue, Circular 14 has extended debt rescheduling for customers for a further six months. In particular, the SBV allows credit institutions and foreign bank branches to restructure debt incurred before 1 August 2021, instead of June 10, 2020; and debts with repayment obligations from 23 January 2020 to June 30, 2022, instead of to 31 December 2020. The restructuring of the repayment term for customers will be carried out until 30 June, 2022. In addition, the implementation of exemption and reduction of interest and fees for customers in accordance with Circular 01 as amended and supplemented by is implemented until 30 June 2022.
As explained by the SBV, the extension of the debt restructuring period for another 6 months is based on the Government's vaccination and Covid-19 control plan. In the first draft circulated for consultation in the SBV, the Banking Inspection and Supervision agency evaluated and proposed that the restructuring of the repayment term, the exemption or reduction of interest and fees, and keeping the debt group unchanged applied to the debt balance incurred during the period from 23 January 2020 to 30 June 2022 is appropriate to better support businesses and people affected by the Covid-19 epidemic. As a result, customers suffering from the pandemic will have an additional period of 6 months to resume their production and business.
